TORONTO – Knick owner James Dolan was unwilling to pay a couple of million bucks to make a sexual-harassment lawsuit against his team president disappear.

But yesterday, Dolan signed off on a deal to bring in defensively deficient, 33-year-old Jalen Rose – a move that will cost Dolan $34 million in future payroll, including luxury tax.

In what smacks of a diversionary attempt by the franchise to get Knick fans talking basketball and not lawsuits, president Isiah Thomas obtained Rose from Toronto for maligned Antonio Davis, whose wife, Kendra, was charged this week in Illinois with misdemeanor battery for throwing a cup of coffee.

The Knicks also get a likely mid-first-round pick (Denver’s, via Toronto), and $3 million in the exchange to help pay Rose’s maximum salary. The trade was announced two hours before the Knicks’ 104-90 blowout loss to the Raptors at AirCanada Centre, their 10th defeat in their past 11 games.

The two players who switched teams did not play last night. Davis stayed at the team hotel, and Rose joined the Knicks on the bench in civvies.

How the deal fits into Thomas’ rebuilding vision is sketchy. The Knicks have the NBA’s third-worst record, 14-31, 8½ games out of the eighth seed in the Eastern Conference. Thomas said, “I’m not saying this is a move to get to the playoffs or anything like that.”

What may be at work is the Knicks wanted an upgrade to avoid finishing with the NBA’s worst record and having the utter humiliation of Chicago owning its potential No. 1 overall pick.

Whether this trade stops the slide is debatable, because it weakens the Knicks defensively. Rose, who started 16 games for Toronto, was averaging 12.1 points. Davis was the Knicks’ best interior defensive player.

“I’ve got a lot left; people want to put a cap on your ability because of your age,” Rose said. “Everyone ages different. I don’t think it’s a total rebuilding situation.”

Thomas now can brag about having two first-round picks this June (Denver’s and San Antonio’s). The Spurs’ pick likely will be 28th or 29th.

The Raptors made the trade for salary-cap relief this summer.

“It helps our present and also helps our future,” Thomas said. “Next year we’ll have two first-round picks. We view the draft as important. We have a lack of scoring and a void at the small-forward position.”

For one year, a Rose-for-Penny Hardaway exchange was discussed. Hardaway’s season likely is finished; he is rehabbing an injury in Houston. Trading Davis was curious; he was coming off a five-game suspension for rushing into the stands in Chicago to defend his controversial wife.

The switch to Davis, Thomas said, was unrelated to that incident.

“It has zero to do with anything,” Thomas said.

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Trading places

The Knicks yesterday acquired Jalen Rose from the Raptors in exchange for Antonio Davis. Here’s a look at their